BANKING AND FINANCIAL AWARENESS -Bank PO/SO/Clerical – 30.09.16

1 EPFO to invest Rs 13,000cr in ETFs in FY17

Buoyed by a handsome return of 12.1% in the first year of investing fresh inflows in equity exchange traded funds (ETFs), Employees’ Provident Fund Organisation (EPFO) has decided to invest 10% of its annual incremental deposits or an estimated R13,000 crore in the current fiscal in these funds.

“We have already issued a notification raising the EPFO investment limit of ETFs to 10% from the current 5% of its investible deposits,” labour minister Bandaru Dattatreya said here, adding that EPFO has already invested R1,500 crore in ETFs in the first half of the current fiscal and will invest about R11,500 crore in the remaining six months.

In the year to July 31, 2016, the EPFO invested R7,468 crore of incremental deposits received in ETFs (in a 75:25 ratio between Nifty 50 and the Sensex) through various schemes, namely EPF, EPS, EDLI, PNG and SPF. The returns under various schemes have varied from 9.6% (PNG-Sensex) to 18.3% (SPF-Nifty), as the allocations have been in a phased manner.

2Budget merger may need Parliament’s nod

The Centre may have to pass a resolution in Parliament in the upcoming session to finally put an end to the practice of presenting a separate Rail Budget, senior Railway Ministry officials said.

Although the Constitution does not provide for a separate Rail Budget, it was separated from general finances after a resolution was passed in the Legislative Assembly (now Parliament) based on the recommendations made by the Acworth Committee in 1921.

“Based on the recommendations made by Acworth Committee, it was decided that the separation of Railway Finances be effected by means of a Convention to be laid before the Legislative Assembly , in the form of a resolution, and that the Assembly be asked to agree to it,” the official said, on conditions of anonymity. The matter was placed before the House, which voted the Convention resolution of 1924.

Rising tensions between India and Pakistan wiped off around Rs 2.40 lakh crore of BSE-listed companies in terms of market capitalisation. The BSE Sensex which kicked off the day on a firm note slipped over 550 intraday after the government said it had conducted surgical strikes on militants preparing to infiltrate from Pakistan.

Later, the 30-share index closed 465.28 points, or 1.64 per cent, down at 27827.53, while the 50-share Nifty index settled 153.90 points, or 1.76 per cent, down at 8,591.25. Total market capitalisation of BSE-listed companies plunged to Rs 109.62 crore from Rs 112.04 crores.

Among the 51-components in the Nifty index, 46 stocks ended the day in negative terrain with Bharat Heavy Electricals Ltd (BHEL) slipping the most 7.51 per cent, followed by Adani Ports (down 4.52 per cent), Hindalco (down 4.37 per cent), Aurobindo Pharma (down 4.30 per cent) and Bank of Baroda (down 3.98 per cent). On the other hand, Bharti Infratel, TCS, ITC, Mahindra & Mahindra and ONGC gained 3.36 per cent, 0.60 per cent, 0.28 per cent, 0.24 per cent and 0.24 per cent.

4No negative impact on economy, says industry

India Inc rallied behind the Army’s move to conduct surgical strikes on terror launch pads across the Line of Control and said it was time to act tough while ruling out any negative impact on the country’s economy and trade.

India’s exports to the neighbouring country worked out to $2.17 billion, or 0.83 per cent, of the total Indian outward shipments while imports were less than $500 million, or 0.13 per cent, of the total inward shipments.

5NTPC’s Green Masala bonds listed at Singapore Stock Exchange

“NTPC has become the flag bearer for Rupee denominated Indian paper bringing in a new set of investors to meet the financing needs of the Indian Infrastructure sector on listing of INR 2000 Crore Green Masala Bonds at Singapore Stock Exchange,” the company said in a statement.

NTPC Director (Finance) K Biswal NTPC was the special speaker at the event where a presentation was made by him to a large audience highlighting the PSU’s Green Masala Bonds issue for financing renewable energy projects.

6Commercial tax staff may strike over powers

Employees of Commercial Tax departments, under the State governments, will go on strike on October 15 if their demand to be allowed to monitor and collect Service Tax, under the Goods and Services Tax (GST) regime, is not addressed. Almost two lakh employees of Commercial Tax departments will go on strike in October if the issue is not addressed in Friday’s GST Council meeting, the All India Confederation of Commercial Taxes Association (AICCTA), said on Thursday.

In the first meeting of the newly constituted GST Council last week, Finance Minister Arun Jaitley announced that the officers of the Central government would exclusively monitor Service Tax assessees under the GST regime.

However, earlier, during all the deliberations of the Empowered Committee of State Finance Ministers it was decided that all taxpayers below the annual turnover threshold of Rs.1.5 crore would be monitored by the officials of the respective State’s Commercial Tax department.

7ICICI Prudential Life shares tumble 11% on market debut+

Shares of ICICI Prudential Life Insurance Co. Ltd ended their first day on the stock exchanges nearly 11% below their issue price, even after the company’s Rs6,057 crore initial public offering (IPO) was subscribed 10.48 times last week.

ICICI Prudential, a subsidiary of India’s top private sector bank, ICICI Bank Ltd, is the country’s largest private sector life insurer, with assets of Rs1.01 trillion. It is the first Indian insurer to go for an IPO. The IPO was also the largest new share sale in India since state-run Coal India Ltd raised Rs15,000 crore in 2010.

ICICI Prudential shares opened at Rs329 on Thursday, 1.5% below the issue price of 334, and touched a high and low of Rs333.9 and Rs295.50, respectively, during the day. Shares closed 10.88% lower at Rs297.65 on BSE, below the lower end of the IPO price band of Rs300-334.

8Second Largest Bank in Commerz to cut one-fifth force

Germany’s Commerzbank (CBKG.DE) will cut more than a fifth of its workforce and suspend its dividend as it tackles the challenges of low interest rates, weak profits and the shift to online banking.

Germany’s second biggest lender said on Thursday it plans to cut 9,600 of its 45,000 full-time positions, a more drastic move than the 10 percent staff reduction at larger rival Deutsche Bank (DBKGn.DE), which remains under pressure for deeper cost cuts.

Squeezed by the European Central Bank’s money printing policy, German lenders have been seeking ways to boost revenue by passing on costs to corporate customers and increasing fees for retail depositors, but profit margins remain thin in one of Europe’s most competitive banking markets.

9Operations across LoC won’t impact markets: SBI

India’s strike on terror launch pads last night across the Line of Control (LoC) is unlikely to have any major impact on the financial markets thanks to the strong macro-economic data, says a report by SBI.

“While the initial response of the financial market has been negative, we believe such attacks are unlikely to have any material impact on the markets,” SBI said in its report ‘Ecowrap’.

Stock market benchmark Sensex came under severe selling pressure and plunged 465.28 points or 1.64 per cent to 27,827.53 at close today. Domestic currency depreciated over 40 paise to close at 66.84. The report said Indian economy is currently on a sound footing with favourable macro numbers.

10‘Germany may become giant ATM machine after Brexit’

The Brexit vote gives Britain a golden opportunity to forge a new role for itself as the guardian of global free trade, Prime Minister Theresa May’s pro-Brexit trade minister said on Thursday.

“The UK has a golden opportunity to forge a new role for ourselves in the world, one which puts the British people first,” said Fox, who is likely to play a key role in Britain’s Brexit negotiations.

“This is potentially the beginning of what I might call the post-geography trading world,” he said. “We stand on the verge of an unprecedented ability to liberate global trade for the benefit of our whole planet.”

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